Sacgasco has secured an exclusive option to acquire RL Energy (RL), which has rights to earn a 60% working interest in Petroleum Exploration Permit PEP11 in the offshore Sydney Basin, Australia.
In May, RL entered a farm-in deal with Asset Energy over PEP11 by carrying asset through defined farm-in-works.
Asset Energy currently operates the permit with an 85% ownership.
Under the terms of the option, Sacgasco is required to pay $25,000 option fee and issue two million shares to RL shareholders in exchange for an exclusive option to purchase all the shares in the company.
Once the company exercises the option, which is expected by 30 January 2019, RL shareholders will be entitled to receive a $25,000 consideration and four million ordinary shares in Sacgasco.
The firm will also assist RL in filing an EP for the 3D seismic acquisition and fund $326,000 worth of expenses for the EP.
Sacgasco managing director Gary Jeffery said: “We are pleased to diversify the company’s asset base by working in Australia to develop the offshore Sydney Basin.
“This project gives us the opening to provide gas to a market that is chronically undersupplied on Australia’s East Coast.
“The Sacramento Basin remains our first priority and key focus area as it has all the attributes to deliver real near-term value for shareholders. I expect we will have further news on our California activities imminently.”
The company believes that the option on the permit fits its strategy of exploring under-valued and under-evaluated opportunities connected to materially under-supplied oil and gas markets.
Sacgasco has also agreed to fund RL’s efforts to advance the farm-in-works for the highly prospective Sydney Basin, develop an agreed work programme, and jointly work with the joint venture partners to explore the permit.
The permit area is interpreted to be highly prospective for natural gas, according to the company.
